The Competition and Markets Authority has announced an investigation into platform holders’ online contracts. The CMA will look into whether or not auto-renewal of such contracts is legal, but also into cancellation and refund policies, as well as terms and conditions.
In the announcement (spotted by GI.biz), the CMA said it has “written to Nintendo Switch, PlayStation and Xbox requesting information about their online gaming contracts to help better understand their practices.” It also pointed out that “at this early stage, the CMA has not reached a view as to whether or not companies have broken consumer protection law. “
The issues the CMA wants to discuss include:
- Are the contract terms unfair? Do the companies’ terms give them wide discretion to change the quality of the deal, for example, by reducing the number of games included or increasing the price?
- How easy it is to cancel or obtain a refund? Are there any factors that make it difficult for people to cancel their contract or get their money back?
- How fair is the auto-renewal process? Are customers clearly told that their membership will be rolled over, are they regularly reminded that they are on a roll-over contract before further payments are taken, and is auto-renewal set as the default option?
Andrea Coscelli, CMA’s chief executive, commented: “Roll-over contracts are becoming more and more commonplace and its essential that they work well for customers. Our investigation will look into whether the biggest online gaming companies are being fair with their customers when they automatically renew their contracts, and whether people can easily cancel or get a refund. Should we find that the firms aren’t treating people fairly under consumer protection law, we are fully prepared to take action.”